12/31/2012

And why not?! They would get their goal of increasing taxes, and get to blame someone else for that. Win win. Lost in all the fiscal cliff negotiations are actual spending cuts. That press conference tuis afternoon proved that this is all about hyper-partisan politics for Teh One. And now it is rumored that there is a tax increase deal that will accompany a spending increase, with spending cuts to be discussed sometime in the future. Good Allah.

Spending cuts? That’s funny considering the Congressional pay raises the president called for this week.

At least one representative sees the lack of prudence.

A Democratic member of Congress is moving to block President Barack Obama’s congressional pay increase. The move, led by John Barrow of Georgia, is to prevent the pay increase that Obama issued through an executive order from going into effect.

“At a time when American families face real hardship, it would be irresponsible to allow Congressional pay to increase,” says Barrow in a statement. “Too many families face uncertainty in the New Year for Congress to get a bonus. Folks expect us to be looking out for them, not ourselves, and we should be working to lower taxes, cut spending, and get our nation’s debt under control. Congress should get to work, and I urge the House leadership to do anything and everything possible to stop this pay increase for Members of Congress right away.”

The problem is that there’s never a politically good time for increasing Congress’s pay, and there are lots of other people (e.g. judges) whose pay is linked to that of Congressmen, so they never get any increases either. Yeah, now’s really not a good time, but when is?

How about when they actually earnthe raise through their real time hard work and efforts?

The fact is that they are paid at least $165,500 a year, and they hardly show up at all. In 2006, for example, Congress was only in session for 103 days, slightly more than two days a week on average. Nice work, if you can find it.i

I don’t have any respect for Paul Krugman (His winning a Nobel prize furthered my contempt for him), but can anyone tell me if there is any grain of true to this quote from “Brewing Up Confusion” By PAUL KRUGMAN, Published: December 30, 2012:

The reality is that President Obama has made huge concessions. He has already cut spending sharply, and has now offered additional big spending cuts, including a cut in Social Security benefits, while signaling his willingness to retain many of the Bush tax cuts, even for people with very high incomes. Taken as a whole, the president’s proposals are arguably to the right of those made by Erskine Bowles and Alan Simpson, the co-chairmen of his deficit commission, in 2010.

Other than the fact that this was written by Krugman, the use of superlatives without any data is suspicious. Can anyone makes a substantive rebuttal?

How about when they actually earn the raise through their real time hard work and efforts?

How do you measure those?

The fact is that they are paid at least $165,500 a year, and they hardly show up at all. In 2006, for example, Congress was only in session for 103 days, slightly more than two days a week on average. Nice work, if you can find it.i

That’s ridiculous. It makes the obviously false assumption that Congressmen’s job is to be present on the floor of the chamber, and the rest of the time they’re loafing. Everyone knows that’s nonsense, that what happens on the floor is the least important part of their job, and that they’re almost never not working.

Hey, what a great deal we negotiated. Apparently we get $15 billion in spending cuts in return for $600 billion in tax increases! Hey, the 40:1 tax increase to spending cut ratio is what we were looking for all along, right?

Happy effen, New Year to everyone in the last year of the Great American Experiment with representative democracy. It was swell while it lasted.

The cutoff is $400,000 for a single individual and $450,000 for couples, but tax deductions and credits start being phased out at $250,000 for singles and $300,000 for couples (the Bush tax cuts of 2001 had ended this business of phaseouts of the personal exemption and other deductions) and the sequestration is postponed for two months by being replaced by some tax increases and $24 billion in other (not yet specified) cuts – the details could be a hangup.

The alternative minimum tax is fixed permanently.

Capital gains go from 15% to 20% as would happen if the law expired, but dividends do not go up from 15% to ordinary income, but only to 20%. All these new tax rates are permanent, that is, do not expire.

The renewable energy tax credit is also extended

Also, the Congressional pay raise is canceled, so that voting against it is a vote to raise Congressional pay, and milk price supports continue at their old level, not based on a formula calculated in the 1920s using 1910-1914 statistics, enacted in 1949. (That might be a separate bill. At least that’s the House plan. The Senate would extend the entire old farm bill, as is, for nine months.)

There is some kind of concession by Republicans on unemployment insurance (extended? Just what? All of them for x amount of time?) and on estate taxes. The estate tax level will not be indexed to inflation. The threshold will remain at $5 million, not $3.5 million as Democrats had proposed, but the rate will go from 35% to 40% but not 45% as the Democrats had proposed.

House Speaker John Boehner has been committed since last week to allow a vote on anything that passed the Senate (with support from Republicans) but he’s not saying anything about whether it will pass, or be amended.

I presume payroll taxes rise by 2% since nobody wanted to freeze them, and all the other tax increases, besides the rates, go into effect. Or not? Child tax credit, no word.

No changes in Medicare or Social Security for now. The doc fix is taken care of..

Special Obamacare taxes, not affected (they are mainly 0.9% on earned income above a certain high level, and 3.9% on unearned income above a certain level.)

The debt limit argument is reserved for the next Congress.

This deal was worked out mainly between Senator Mitch McConnell and Vice President Joe Biden.

Unemployment benefits, as exists under current law, will be extended for one year. This is what reduces net spending cuts to $15 bill. Hurricane Sandy relief would probably result in a net spending increase, unless there’s some plan to cut something else.

The bill may get as few as 70 Republican votes in the House of Representatives, but could pass with Democratic votes,if Democrats don’t defect on the grounds it raises taxes too little (or cuts them too much)

Spending Cuts?
Anyone want to wager that the expenditures for FY-2013 will be lower than they were in FY-2012?
I didn’t think so.
What the pols need to really worry about is whether the revenues will actually be greater – and that’s a valid concern when remembering the old saw that what you tax you get less of.
The GOP Establishment has a lot to answer for in 2014.

The bill passed the Senate shortly after midnight Eastern time, 89-8, with Senator Tom Harkin being one of those who spoke and voted against it (on he grounds that $250,000 was already quite upper bracket – no need to go higher)

The Washington Post indicates that the estate tax is indeed indexed. On the other hand, phaseout of deduction and exemptions starts at $200,000 and $250,000, not $250,000 and $300,000.

This phaseout is a really bad idea. If the exemptions are legitimate, taxes should only be calculated on what remains, otherwise you are treating equal circumstances differently.

Also this is in effect a higher marginal tax rate which then drops down again as income rises – but differently for different people. And it makes people not want to claim a personal exemption in some cases and try to give it to somebody else.

The deal was essentially worked out by 1 a.m. Monday but then President Obama wanted the postponement of the sequestration “paid for” half by tax increases and half by finding other cuts, which he called a balanced approach.

I don’t have any problem with House and Senate salaries — they seem a bit low actually.

So, I have a modest proposition: Set 2012-2013 spending as a baseline. For every billion dollars UNDER that baseline that we send in any future year, each member of Congress gets an extra $100 that year. For each billion over, they get $100 less.

Come in $500 billion under, get a cool $50K.

If the last year’s budge is in balance, we double your winnings or halve you losings for that year.

The republicans that voted for this are traitors.
I will never vote for a republican. ever.
Conservative-yes. republican F no.
Stupid Americans, embarrassing and illiterate.
The republicans can compromise the compromise like no other ship of fools.

It’s pretty obvious that Jerry Brown wants to avoid raising taxes again until he is safely reelected, but come January 2015 you can bank on California Democrats reinstituting the higher car tax among other “revenue raisers.”